The piercing effect of rising unemployment and increasing living costs is taking its toll on the rental sector.
A report released this week from Templeton LPA finds that severe cases of rent arrears are up by 13%. This is similar to our own statistics, which shows that instructions against tenants in severe rent arrears are up by 11%, year on year.
However, this seems at odds with the figures from Buy-to-Let mortgage lenders which suggest mortgage arrears are down by 12%.
There could be a number of reasons for this. Either the full effects are yet to be felt, or, landlords may be taking action against non-paying tenants a lot quicker than they were this time last year. In reality, it is likely to be a mix of the two.
For landlords, the message is clear. First, ensure that you properly reference your tenant in advance to whittle out risky tenants. Many novice landlords make the fatal mistake of skipping this step.
Second, if your tenant does fall into difficulty with paying their rent, take action quickly. Establish a repayment plan for the arrears that is fair and achievable for the tenant. Failing this, landlords should consider eviction proceedings.
